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Progress Energy Takes 200 MMcf/d on Southeast Supply Header

Progress Energy Florida has agreed to take 200 MMcf/d of firm transportation service on the proposed Southeast Supply Header, LLC (SESH) pipeline system, which will bring gas from East Texas and North Louisiana to growing U.S. markets in the Southeast.

The 270-mile, 36-inch and 42-inch diameter pipeline will extend from the Perryville Hub in northeastern Louisiana to the Gulfstream Natural Gas System near Mobile, AL. Along the route, SESH will access several major pipelines serving the eastern United States and will have access to several storage facilities.

The agreement with Progress Energy, along with Florida Power and Light's commitment for 500 MMcf/d, brings SESH's total subscribed capacity to 700 MMcf/d (see Daily GPI, Aug. 25). It's initial capacity is expected to be 1 Bcf/d, but the system is expected to be expanded through compression to 1.5 Bcf/d.

On Dec. 18, SESH filed an application with the Federal Energy Regulatory Commission (FERC), seeking approval to construct, own and operate the pipeline.

"We look forward to working with the Federal Regulatory Energy Commission to facilitate their timely approval of our project and anticipate having SESH in service in the summer of 2008," said Cy Zebot, chief commercial officer of CenterPoint Energy's pipelines group. CenterPoint and Duke Energy Gas Transmission are partners in the project. Southern Natural Gas also has agreed to assume partial ownership of a portion of the proposed pipeline system (see Daily GPI, Dec. 11). "Progress Energy Florida's commitment validates the significance of this pipeline project," said Zebot.

Progress Energy CEO Jeff Lyash noted that gas plays an important role in "balancing the fuel-mix diversity of our generating fleet and this project will enhance supply reliability."

The proposed pipeline is designed to bring growing production from the Barnett Shale and Bossier plays, among others, in East and North Texas to the Southeast's rapidly growing power generation markets. The pipeline will have multiple interconnections with other pipelines in the Gulf Coast region, including Florida Gas Transmission, and will terminate at a connection with Gulfstream, which extends across the Gulf of Mexico to the Florida peninsula.

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